Author: Simon Volkov

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California real estate investor, Simon Volkov, pro

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Probated: Tips For Keeping Inheritance Property Out of Probate Court By Simon Volkov

  in Family Concerns | Published 2011-09-20 07:31:15 | 97 Reads | Unrated

Summary

Probated refers to decedent estates held in probate court Unless a person establishes a trust, everything they own must be transferred to probate court until their last will is validated and outstanding debts paid

Full Content

Probated refers to decedent estates held in probate court. Unless a person establishes a trust, everything they own must be transferred to probate court until their last will is validated and outstanding debts paid.

Probated estates are managed by an administrator named within the decedent's Will. If the person died without a Will (intestate), a judge will appoint someone to handle estate affairs. Estate executors are usually a family member or close personal friend. In some cases, a probate attorney or estate planner will be appointed.

The probate process can tak
e several months to complete. During this time, the probate personal representative must submit creditor letters and pay outstanding debts. If real estate is involved, the property usually transfers to the surviving spouse; if one exists.

Probate real estate can create financial burdens for the estate. If the decedent held a home mortgage loan the estate must continue making payments throughout the duration of probate. Property taxes and homeowners insurance must remain current. General maintenance, lawn care and repairs need to be addressed.

If the estate cannot afford to pay real estate related expenses, the probate executor can elect to sell the property. Estate administrators must have authorization to sell inheritance property and court confirmation is required in some states. If more than one heir is entitled to the real estate, each must agree to the sale unless ordered through the probate court.

Several techniques exist to keep estates from entering into probate. These range from establishing payable on death and transfer on death beneficiaries to establishing irrevocable trusts.

Payable on death beneficiaries can be assigned to bank accounts. All that is required is to fill out a form through banking institutions. Account holders can designate as many beneficiaries as they desire and can state what percentage of the money each beneficiary will receive.

Transfer on death beneficiaries can be assigned to financial portfolios, individual retirement accounts (IRA), 401k plans and life insurance policies. The process is the same as payable on death and requires providing names, addresses and social security numbers of named beneficiaries.

In most states, the probate executor will need to submit date of death value statements to the county tax assessor's office. Each financial institution will provide date of death values. Tax assessor forms can be downloaded from state or county websites. Once the tax assessor signs off on the forms, inheritance proceeds can be distributed.

Establishing trusts usually requires the assistance of a professional estate planner. There are many types of trusts and each can be customized to suit individual needs. The two most common trusts include living trusts and irrevocable life insurance trusts.

Assets placed inside a living trust can include automobiles, real estate, art work, collectibles, jewelry and other valuable items. Estate assets are owned by the trust; not the decedent. Trust assets avoid the probate process and are automatically transferred to named beneficiaries upon the decedent's death.

Irrevocable life insurance trusts include a contract used to administer the policy on behalf of named beneficiaries. The Will is placed inside the trust and inheritance assets are exempt from probate. Life insurance proceeds are exempt from inheritance taxes.

Death is never easy to deal with. Having to deal with probate after losing a loved one is a tragedy. One of the best gifts you can give loved ones is to take steps now to keep inheritance property out of probate.

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About the Author

California real estate investor, Simon Volkov, provides information and resources about Making Home Affordable programs, foreclosure alternatives and how to short sale real estate via his website. Simon's comprehensive real estate article library offers up-to-date information to help borrowers make informed choices. Learn more by visiting www.SimonVolkov.com.